How to get a Florida Auto Dealer License for your used car dealership
Are you thinking of starting a used car dealership in Florida? The first major step in the process is procuring a Florida Auto Dealer License. According to the Florida DMV, you must apply and obtain a Florida Dealer License if you are someone who will be buying, leasing, dealing, selling and/or displaying 3 or more vehicles for sale within a 12-month period.
There are a few different types of Florida Dealer Licenses you should know about. Determine which of these you need before proceeding:
- Franchise Dealer: For dealers looking to sell new and used vehicles under an agreement with a manufacturer.
- Service facility: For dealers who also want to service the makes of vehicles that they sell.
- Independent Dealer: For dealers looking to buy and sell used vehicles at the retail or wholesale level.
- Auction Dealer License / Wholesale Distributor: For dealers looking to buy, sell and deal in vehicles exclusively wholesale or with motor vehicle auctions.
Source: JW Surety Bonds
Here is a step-by-step guide you can follow when applying for your Florida Auto Dealer License:
Step 1: Determine the location of the compliance examiner nearest you
Firstly, visit flhsmv.gov/locations to search for the compliance examiner in your county.
Step 2: Ensure the planned location of your auto dealership is allowed
Thoroughly research the requirements for the display space, lot, office, and general location of your planned auto dealership must meet the requirements found in the Florida Administrative Code 15C-7.003.
Some of these dealer location requirements are:
- A precise address that is not residential
- An office with appropriate bookkeeping capabilities
- Adequate vehicle storage space
- Proof of lease or ownership of property for legally operating a business
Step 3: Obtain important identification
Ensure you have gathered a Federal Employee Identification Number (FEIN) from the IRS and a sales tax number from the Florida Department of Revenue.
Step 4: Attend & complete a pre-licensing dealer training class
Every auto dealer in Florida must complete a training course that is sanctioned by the FLHSMV (Florida Department of Highway Safety and Motor Vehicles). You can find a list of approved dealer training schools here. Your certificate is valid for 6 months from the issued date, and you will need to include a copy with your dealership license application.
LICENSE APPLICATION REQUIREMENTS:
Step 5: Procure your business location
If you have not yet already, it is time to decide upon and obtain your official business location. You cannot complete your Florida Auto Dealer License without it!
Your lot and office must:
- Be a permanent structure
- Meet the requirements outlined in Step 2
- Be a minimum of 100 square feet of floor space (excluding hallways, restrooms or closets) and have minimum 7-foot high ceilings
- If in a shared building, it must have its own clear separate entrance, address, signage, and hours of operation
- Vehicle and promotional display spaces must have immediate, unobstructed access to the general public via a street or highway
You must provide proof of registration to the FLHSMV of this location of the business entity and fictitious trade name with the Florida Division of Corporations.
Your compliance examiner will conduct an inspection to approve your dealership location. Ensure the above is in place before contacting them to schedule the inspection.
Step 6: Install signage at your location
As an extension of Step 5, now is the time to install the required signage at your dealership.
Your main dealership sign must be permanent, and visible from the roadway (50 yards +). It serves as clear identification of the dealership at its place of business, so ensure it is well-designed with branding and legibility in mind.
You must also have your hours of operation clearly posted at or near the main entrance on a placard or other means of durable signage that resists tampering by the elements or visitors. This signage must provide a phone number that can be used to contact the dealer if necessary.
Step 7: Obtain & provide proof of Garage Liability Insurance
Independent, wholesale, salvage, and auction dealer applicants can choose from the following options for their liability insurance:
- Obtain a Garage Liability Insurance, which must be for a minimum of $25,000 combined single-limit liability coverage for property damage and bodily injury, as well as $10,000 personal injury protection
- Submit a general liability insurance policy coupled with a business automobile policy, for the same amounts as stated above
Step 8: Get a Surety Auto Dealer Bond
The bond is a form of insurance that guarantees that you will fulfill your obligations as a Florida Auto Dealer. The amount required for the application is $25,000. This surety bond must be submitted at the time of your application, along with the original surety bond form 86020 for motor vehicle dealers.
Step 9: Complete FDLE electronic fingerprinting
As part of your Florida Auto Dealer License application, you must obtain electronic fingerprinting for all officers of the dealership from a Florida Department of Law Enforcement (FDLE)—approved service provider. This will also include a declaration of any previous felony charge. Include a copy of this completion receipt with your application documents.
Step 10: Submit your completed application form and documents
Lastly, submit your application to the FLHSMV, which includes form 86056 and the following required documents:
- Pre-License Dealer Training Certificate of Completion
- Proof of Business Registration
- Lease Agreement for Business Location
- Photos of lot space, parking, road access, dealership entrance, and appropriate signage
- Proof of electronic fingerprinting
- Proof of Identification
- Surety Bond
- Proof of Garage Liability Insurance
- A $300 application fee
The Motor Vehicle Field Operations Regional Office will be processing your application and, provided all documents are in order, will issue you your Florida Auto Dealer License.
Sources to help compile this article include: FLHSMV, JW Surety Bonds, Wayne Reaves